Forex seasonals: A tailwind is blowing for AUD/USD
The March-April period is a winner for the Aussie
The Australian dollar has shrugged off risk aversion so far today and that's a familiar pattern in the March-April period.
March is the best month for AUD/USD and April is the 3rd best month. Over the past decade, the pair has averaged a 1.75% and 1.20% monthly gain, respectively.
One warning is that the seasonal tailwind has failed in each of the past two years, so some caution is warranted. That said, there is a solid risk-reward and risk management case to be made with support at the Feb low of 0.7054.
Looking at seasonals more broadly, I wrote about crude strength at the start of February and that was a winner with oil prices rising more than 6% in the month.
Other March patters:
- Modest DXY weakness
- 5 consecutive years of weakness in Bitcoin
- Modest EUR strength
- Modest gold softness (am I too late on that one?)
- It's the best month for Japanese and US stocks
- Best month for NZD
- Poor month for the yen
The general theme is risk appetite and that's not exactly what we've seen so far but it's only March 4.